Ginny Roscamp, Deputy Press Secretary, Federal Communications, Sierra Club, ginny.roscamp@sierraclub.org
WASHINGTON, DC — Senator Brian Schatz (D-HI) and Rep. Sean Casten (D-IL) have reintroduced a bill titled the “Climate Change Financial Risk Act”, which directs the Federal Reserve to conduct stress tests on large financial institutions to measure their resilience to climate-related financial risks. Read more in the press statement from Sen. Schatz.
The Sierra Club is again endorsing the Climate Change Financial Risk Act, which acknowledges that climate risks to our financial system are critical for financial institutions to measure and manage, as recognized in the pilot climate scenario analysis done by the Federal Reserve in 2023 and the Principles for Climate-Related Financial Risk Management for Large Financial Institutions published by agencies in 2023.
“As financial regulators retreat under political pressure, this bill represents a much-needed step to ensure our financial system is better prepared for the growing risks of climate change. Investors need regulators to provide clear, forward-looking assessments of systemic risk — and to ensure that financial institutions aren’t throwing more fuel on the fire of the climate crisis. With climate disasters escalating and financial consequences mounting, leaders at all levels of government must act to build a more stable and sustainable financial system. We applaud Sen. Schatz and Rep. Casten for their continued leadership to make that happen,” said Ben Cushing, Sustainable Finance Campaign Director at the Sierra Club.
The Climate Change Financial Risk Act would require the Federal Reserve to create climate change scenarios for financial stress tests, with input from federal scientific agencies and an advisory group of climate scientists and climate economists. The Federal Reserve would then conduct stress tests every two years on the largest financial institutions.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.